China's outbound investment in the commercial real estate sector jumped 92 percent year-on-year in the first five months of 2015, said a report released by commercial realty consultancy Cushman & Wakefield (C&W) on Wednesday.
From January to May, investors from the Chinese mainland bought approximately $9.44 billion worth of office buildings, shopping malls and other commercial properties around the world, according to the report.
Office properties continued to be the most favored segment, accounting for more than 50 percent of the total investment, and the US remained the top destination, absorbing about 25 percent of the capital flows, due to its status as a "safe haven" with low interest rates and moderate economic growth, according to the report.
Australia and the UK were the second and the third most popular investment destinations for Chinese investment.
Chinese investment in European countries also showed a clear growth trend, and Germany, Italy and Spain appeared for the first time on the top 10 list of most popular destinations for Chinese investors, the report said.
Rates of return in overseas markets exceed 5 percent, and some cases returns can reach 6 percent or 7 percent, better than in the Chinese market, Lu Ming, senior manager of research and consultancy with C&W, told the Global Times on Wednesday.
In addition to investors from the private sector, more insurance companies have become involved in the market since the nation's insurance regulator lifted restrictions on property investment, Lu added.
In February 2014, the regulator raised the cap on real estate-related investment from 20 percent to 30 percent of total assets, triggering a wave of outbound activity by insurance companies.
In October 2014, Anbang Insurance acquired a famed hotel, the Waldorf Astoria in New York, for $1.95 billion, the largest outbound transaction in 2014.
However, Lu warned that interest rates can be a big challenge for investors and the fluctuation of the yuan can affect a deal.
Therefore, investors should keep a close watch on their cash flow, Lu said.